The 2nd China Auto Parts Industry Chain Development Forum, hosted by the China Economic Herald and organized by World Economic Future Investment Consulting Co., Ltd., recently took place in Beijing. During the event, industry experts emphasized that while a supportive parts system for China's automotive industry has been established, the sector remains large but not yet strong. This is evident in two key areas: first, there is still a technological gap in core components such as electronics compared to global leaders; second, the organizational structure of China’s auto parts industry requires significant optimization. Experts stressed the need for stronger group development and modular supply chains.
According to the "Long-Term Development Trends and Countermeasures for China’s Automobile Industry" report released by the National Development and Reform Commission in October 2006, domestic vehicle numbers are expected to rise from 30 million to over 100 million by 2010, positioning China as one of the world's top four auto markets after the U.S., Europe, and Japan. To achieve this, the auto parts industry must also reach the fourth tier globally, according to forum participants.
The forum highlighted the long-term vision for China’s automotive industry, with goals set for 2010, 2020, and beyond. By 2010, China aims to become one of the top four auto markets, with domestic car production reaching 100 million units. By 2020, China’s auto output is projected to account for 25% of the global market, with annual production and sales exceeding 20 million units. Exports, including overseas production, are expected to reach 30%, while auto parts exports could hit $100 billion. The industry's value-added contribution to GDP is targeted at 3%, driving related sectors and boosting the overall economy.
Experts like Zhang Xiaoyun, chairman of the China Automotive Engineering Society, expressed confidence in the industry's growth, noting that China’s auto market is expected to reach 85-90 million units this year, becoming the second-largest globally. They emphasized that the strength of the auto parts industry is crucial for China to transition from a major player to a dominant force in the global automotive landscape.
A key theme of the forum was the future of cars being closely tied to the development of spare parts. Zhang Yong, director of the Ministry of Commerce’s Bureau of Industrial Injury Investigation, proposed an intriguing vision: just as computers have evolved into customizable devices, cars may one day allow consumers to assemble their own vehicles using pre-designed parts. While this idea is ambitious, many experts believe it is not impossible, especially if breakthroughs in component technology and standardization occur.
Zhang Xiaozheng, chairman of the China Association of Automotive Engineers, shared insights from his visits to advanced automotive nations. He noted that in some countries, automakers no longer operate stamping shops, as specialized body part manufacturers provide all necessary components. This trend highlights the growing importance of modular and specialized production, which will shape the future of the auto industry.
To achieve professional production and modular supply, experts outlined several steps: technological innovation, industrial development, and structural changes in the parts sector. These elements are interconnected and essential for progress. Technological advancement requires closer collaboration between parts companies and automakers, with both investing in research and system integration.
In terms of supporting industries, Li Wanli pointed out challenges in materials, equipment, and logistics. China lags in high-quality steel sheets, rubber, and advanced machinery, while logistics costs remain high, presenting opportunities for improvement.
Finally, structural changes in the industry are necessary. Current auto parts companies are often affiliated with original equipment manufacturers (OEMs), but experts suggest they should expand internationally, participate in global competition, and consider mergers and acquisitions. Director Li Wanli also highlighted the emerging trend of "0.5-tier suppliers," who provide more modular products, signaling a shift in the global automotive supply chain.
Overall, the forum painted a picture of a dynamic and evolving industry, with clear paths for growth, innovation, and international competitiveness.
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